Schools to take fees on credit

Insitutions expect sharp falls in pupil numbers as record numbers of parents are asking for help to meet the bills

Private schools bracing for sharp falls in numbers during the recession are going to extraordinary lengths to hold on to students. There has been a surge in parents requesting fee reductions - and some schools are even offering credit to struggling families.

Schools traditionally shy away from providing loans, as this requires licensing by the Office of Fair Trading (OFT) and regulation under the Consumer Credit Act.

However, Wellington College, in Crowthorne, Berkshire, which is registered by the OFT, is allowing parents to spread out fees - even after the child has left. In return for the loan, Wellington may secure the debt against the family home.

If parents defaulted on the loan, the school could repossess their home.

Anthony Seldon, the Master, said: "This is a very difficult and challenging time for parents and all schools will be trying to keep as many children as they can. In a worst-case scenario